GOP in disarray as budget impasse threatens shutdown, deep cuts — and default

By Erica Werner and Seung Min Kim June 15 at 3:45 PM

Senate Republicans and the Trump administration are struggling to reach an agreement on a path forward on critical budget and spending issues, threatening not only another government shutdown and deep spending cuts but a federal default that could hit the economy hard.

GOP leaders have spent months cajoling President Trump in favor of a bipartisan budget deal that would fund the government and raise the limit on federal borrowing this fall, but their efforts have yet to produce a deal. And the uncertain path forward was underscored a few days ago at the Capitol, when a budget meeting between key Senate Republicans, including Majority Leader Mitch McConnell (R-Ky.), and senior White House officials left out Democrats, whose votes will be imperative to avoid a shutdown and an economy-shaking breach of the federal debt limit.

“We’re negotiating with ourselves right now,” said Senate Appropriations Chairman Richard C. Shelby (R-Ala.). “The president, the administration, has some views, maybe, that are a little different sometimes than the Senate Republicans have. So we’re trying to see if we can be together as best we can.”

The GOP dysfunction — coupled with a new House Democratic majority with its own priorities — leaves the sides much farther apart than they were at this point in last year’s budget process, which ended in a record-long government funding lapse. At the time, Republicans controlled both chambers of Congress, but negotiations stalled over funding Trump’s immigration priorities.

Trump and Congress face a trio of difficult budget issues. Congress must pass, and Trump must sign, funding legislation by Oct. 1 to avoid a new shutdown. They need to raise the federal debt limit around the same time, according to the latest estimates. Failure to do so would force the government to make difficult decisions about which obligations to pay, and could be considered a default by investors, shaking markets and an economy already showing some signs of alarm.

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